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Department of Financial Regulation outlines FY26 budget; highlights captive insurance growth and key staffing items
Summary
The Department of Financial Regulation told the Senate Appropriations Committee it seeks a FY26 appropriation of about $20.7 million, largely from special funds, with no new positions proposed; presenters highlighted rising captive insurance revenue, three positions tied to pharmacy benefit manager work and a federal CMS grant of about $250,000.
The Department of Financial Regulation (DFR) presented its FY26 budget to the Senate Appropriations Committee on Feb. 25, describing a $20.7 million request largely covered by special funds from fees and assessments, and no new ongoing positions in the governor's recommendation.
Acting Commissioner Sandy Biblestone said DFR's mission centers on consumer protection and regulation of banking, insurance and securities in Vermont. "We operate under the governor's recommended budget, which is [largely] funded by special funds generated by user fees," Biblestone told senators.
Nut graf: DFR officials emphasized steady revenue from captive insurance and other regulated activities, cited accreditation and national engagement needs, and described discrete staffing and line-item changes the committee should note — notably three positions tied to pharmacy benefit manager oversight and a federal grant from CMS.
Key points from the presentation - Appropriation request: DFR reported seeking about $20,700,000 for FY26, funded primarily by special funds (licenses, exam fees and premium taxes).
- Captive insurance growth and revenue transfers: DFR staff said captive insurance activity has increased Vermont's revenue, describing an increase on the order of roughly $8 million to the general fund since 2012 and characterizing Vermont as a competitive domicile for captive insurers.
- Personnel and operating mix: DFR said roughly 83% of its budget is salaries and benefits, 7.5% consulting/contracted services and about 9.5% operating expenses. The department described no new base positions for FY26 but noted one-time or timing items that affect line presentation.
- Pharmacy benefit manager work: Biblestone highlighted a $400,000 "other personal services" line tied to three positions for the pharmacy benefit manager program (Act 127). The presenter said those positions were funded in '25 onetime and now must be added to the FY26 base.
- Federal grant and regulatory standards: DFR reported a federal grant from CMS of about $250,000 that had not yet been spent and said it was watching federal directives tied to that funding. DFR officials also noted upcoming NAIC accreditation review and continued engagement in national standard-setting.
Operational notes DFR staff said the department is consolidating office space in Montpelier and maintaining a small Burlington satellite office. Presenters noted the department uses contracted specialists (for example, actuaries) billed back to examined entities and described vacancy-savings budgeting practices used across state agencies.
Ending: Department leadership said the FY26 request reflects ongoing regulatory work and revenue expectations and identified a few discrete items for committee attention, including the pharmacy benefit manager positions and continuing monitoring of federal funding directives.
